Do nothing
Rachel Reeves could yet catch a lucky break. Some City analysts believe financial markets have overreacted to the challenging economic and fiscal outlook. Donald Trump's bite may prove less aggressive than his bark.
The Office for Budget Responsibility (OBR) has yet to capture the financial market data used in its forecasts and will do so closer to 26 March - leaving time for conditions to subside.
Financial markets are pricing in two quarter-point interest rate cuts from the Bank of England this year. However, many analysts expect a weaker economic outlook could lead Threadneedle Street to cut borrowing costs four times in 2025.
The situation could also become more challenging after Trump's inauguration on 20 January, should he announce sweeping import tariffs, which could in turn lead to surging inflation.
Spending cuts
The Treasury has signalled that spending cuts would be most likely to ensure it does not break its fiscal rules. However, that raises challenges for Labour, having promised no return to austerity, and to fix public services.
Denne historien er fra January 10, 2025-utgaven av The Guardian.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra January 10, 2025-utgaven av The Guardian.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Nostalgic, but the humour is right on trend
Amy Annette is the sort of woman who would rather drop her phone than a lovely bit of bread, she tells us by way of introduction
Gyms Working out the best membership deal
Mabel Banfield-Nwachi looks into the prices at the leading chains, and finds the best deals to save money
Gaza Shells and bombs in rubble put thousands of lives at risk, experts warn
Tens of thousands of people will risk death or injury this weekend from shells and bombs buried in rubble when they try to reach ruined homes in areas of Gaza inaccessible throughout much of the 15-month war, explosive disposal experts and aid officials have warned.
Southport killer: police in fight to access web history
Police have been unable to check what Axel Rudakubana was searching online before he murdered three children in Southport because they are locked in a lengthy US legal process to obtain the data from Google and Microsoft, it can be revealed.
Revolution' Trump sets out his radical agenda. But will it work?
This time last week Stewart Rhodes was serving an 18-year prison sentence for seditious conspiracy over his role in a deadly attack on the US Capitol.
'What do I do if I want to kill?' How teenager became a murderer
When Axel Rudakubana returned to school after summer five years ago, something had changed.
UN voices alarm as M23 rebels advance on Goma in eastern DRC
The military governor of North Kivu province in the Democratic Republic of the Congo has died from injuries sustained during the army's fight against the M23 rebel group as it advances towards the city of Goma.
Scientists pinpoint Andes as origin of potato blight that led to Irish famine
It was a disaster that killed about 1 million people, devastating 19th-century Ireland, but while the potato disease behind the Irish famine is well known, a battle has raged over where it originated.
Subsea cables Could Irish neutrality leave infrastructure open to attack?
They are the bedrock of the internet, keeping everything from TikTok to emergency services, business, banking systems and political and military communications running smoothly.
'Tormented' man shot dead by West Mercia police was shown no mercy, says family
The family of Marcus Meade, who was shot and killed by police on Christmas Eve while thought to be having a mental crisis, have said officers showed \"no mercy\" for him, and are calling for \"full accountability\" of those involved.
